Woodside moves forward on Senegal oil project

AFR Article...

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Woodside moves forward on Senegal oil project


Angela Macdonald-Smith Senior Resources Writer

Dec 3, 2019 — 11.38am


Woodside Petroleum and its partners in a planned $US4.2 billion ($6.2 billion) oil project in Senegal have taken a significant step towards committing to construction, submitting a development plan to the government just before their licence expired.

Chief executive Peter Coleman described the step as a "major milestone" for the Sangomar joint venture, noting the paperwork involves the final documents required by the government to grant approval for development.

Progress at the Sangomar project has been troubled by ongoing arbitration initiated by junior joint venture partner FAR Ltd over Woodside's investment in the venture through a buyout of ConocoPhillips' stake. The dispute has made it more difficult for smaller partners to put funding in place although the partners are still targeting a final investment decision by the end of December.



The Sangomar oil discovery by FAR off the coast of Senegal was the biggest of 2014. BusinessDay

The partners were under pressure to submit a development plan for the field before the expiry of a production sharing contract over the resource expired on December 4.

Junior explorer FAR, which is also listed on the Australian Securities Exchange, said the project had the potential to transform it from an explorer to a "material producer".


"The Sangomar Field Development is anticipated to result in considerable cash generated for FAR and its shareholders from first oil in 2023, a time when FAR would also be one of the largest oil producers listed on the ASX," FAR managing director Cath Norman said.

"This is an exciting time for the joint venture, the people of Senegal and the FAR shareholders.”

The project involves a phased development of the field to develop 645 million barrels of resources, including 485 million barrels of oil, although only 230 million barrels will be produced in the first phase. Production is expected to start in 2023 through a production ship with a capacity of 100,000 barrels a day.

Mamadou Faye, director general of the Senegalese oil company Petrosen, which has a stake in Sangomar, said the company is "excited about being in a position to take a final investment decision".

Woodside said that each joint venture participant is targeted to take a final investment decision on the project later this month subject to government and joint venture approvals.

Shares in FAR, which owns 15 per cent of Sangomar, were up 2.2 per cent in mid-morning trading at 4.7¢, while shares in Woodside, which owns 35 per cent, were 1.1 per cent softer at $33.855. Petrosen owns 10 per cent of the project, while London-listed Cairn Energy owns the remaining 40 per cent.